Sales of a FREE product mirrors challenges of marketing

I plan to write extensively about the challenges that I have had in developing and managing a sales compensation plan on a free enterprise product.

As a matter of introduction, I was talking with one of the other managers of my company on Friday, and while we were talking we came to one giant realization about sales compensation/motivation on a free enterprise product. That realization is that enterprise sales becomes similar to a marketing challenge. In marketing, you never know ahead of time what the right places are to spend your money. Yes, you do market research, and you think hard about where to advertise, where to promote, etc. But, ultimately, many of the places you promote your product are not right, and some exceed expectations.

In free enterprise sales, you essentially have the same challenge. You want to have your team promote your product everywhere and to every prospect possible – with a slant towards the customers that will ultimately drive the most revenue. You want to pay the team appropriately for “closing the million dollar deal” and you want to take attention away from the “pikers” or laggards on the platform. However, since the ultimate revenue generator is indirect, it is very often hard to predict which are the “million dollar” deals and which ones aren’t. Since I’ve been at this position, I’ve been tweaking and tuning the compensation package in order to find that balance – but its never perfect. Some customers that you think will be small turn out to be superstar customers that ultimately bring lots of direct and indirect revenue – and some customers that you think are huge are in reality not.

Luckily for our company, we have mostly hit it right on. We have attracted big and small users to the platform – and in the past few months become the defacto standard in our industry. Now the challenge gets harder as I try to accurately reward closing accounts in proportion to their value to the organization going forward. As the industry standard, many customer will come to us without much work by the sales team – but many still require a great deal of work to get over the finish line.

I would say that my biggest challenge a this point, is making sure I don’t de-motivate my team as I continually change the compensation package and targets to meet corporate goals for driving revenue. I’m currently providing new goals each quarter which can be tough – but so far the team has adjusted quickly and brought home everything we have asked them to do.

These are the challenges that marketing folks deal with all the time. They have to wonder of that TV ad is worht the money – and do they get the “eyeballs” that they need.